Lucky Strike maker sees higher sales in PH despite sin tax

Posted at 02/11/2013 1:32 PM | Updated as of 02/11/2013 1:33 PM

MANILA, Philippines - British American Tobacco, maker of Lucky Strike, sees strong growth this year as the government started implementing the sin tax reform law.

BAT Philippines general manager James Lafferty said the company expects higher cigarette sales this year compared to the previous year.

In 2012, the company failed to meet its sales target of 150 million sticks mainly due to the unfair tax treatment imposed on new brands under the old excise tax law.

"Last year I sold a few million sticks, but this is (well below) the hundred billion sticks in the market. Am I going to sell more? Yes, but it's not going to be easy for a small company. We'll do our best," he said during a briefing in Manila.

Lafferty also expects to grow their market share as BAT introduces other brands. Aside from Lucky Strike, BAT also makes Dunhill, Kent and Pall Mall.

Lafferty said BAT has started investing in the Philippines, as part of its pledge to invest $200 million once the sin tax reform law is implemented. 

"The $200 million is our minimum investment plan for the Philippine, it would definitely rise once we decided to investment in a manufacturing facility," he said. 

However, the manufacturing facility is not likely to be built anytime soon since BAT will continue importing cigarettes from Malaysia. "We have been importing product from Malaysia with Filipino leaf. We will continue doing that while we study manufacturing options. We will manufacture here at some point in time but I don’t have a proposal yet," he said.

At present, BAT is the smallest in the Philippine market which is dominated by PMFTC Incorporated. PMFTC has a 93% share, while Mighty Corp. ranks a far second. Other companies in the top 5 are Japan Tobacco International, La Suerte Cigar and Cigarette Factory Incorporated and Anglo American.